Flynote: Contract
– Purchase and sale of Agricultural land – ‘Foreigner’
– Minister’s consent required – Certificate of
waiver not a requirement at that point – Consent not obtained –
Agreement null and void ab initio – Both parties
contributed to the illegality - Par delictum rule applicable –
Restitution allowed of purchase price only and not interest.

Summary: Contract
– Purchase and sale of agricultural land – Purchaser
“foreigner” in terms of the Agricultural (Commercial)
Land Reform Act 6 of 1995 – Section 58,59 applicable –
Minister’s prior consent had to be obtained before any
acquisition of controlling interest in a company or corporation
passed to a foreign national – Agreement entered into in
February 2003 before amendment of Act making certificate of waiver
necessary also where controlling interest passed to foreigner in
corporation, but such requirement not necessary at time agreement
concluded – When agreement concluded no ministerial consent
obtained – Agreement therefore illegal and void ab initio
– Court finding both parties contributed to illegality and
therefore what applied was par delictum rule and not turpus
causa – Restitution intergrum not applicable –
Plaintiff’s turpitude greater than defendants’ –
Court allowing restitution to plaintiff to do justice between ‘man
and man but only to extent of purchase price – Interest at
prescribed rate denied as doing so would enforce illegal contract –
Costs not allowed to either party because of reprehensible conduct by
both in conduct of litigation plaintiff also denied costs because of
his disrespect for laws of land.

[1]
This is a difficult case. It is difficult because it raises, in a
very real way and on a human level, conflict between the need on the
one hand to do justice between man and man and, on the other, the
importance of exacting respect for the law of the land. At the core
of the dispute before court is a failed transaction involving the
acquisition by a foreigner of a corporate entity that owns
agricultural land in Namibia. Namibian law1places restrictions on
foreigners' access to and ownership of agricultural land. It is the
product of the country's political past which was described by this
court in the case of Kessl
v Minister of Lands Resettlement and Two Similar Cases2as ‘the product of
an intensive effort by the Namibian Government to address the need
for land reform’.3The Chief Justice
charachterised it as follows in Schweiger
v Muller4:

‘It
is evident …that the legislative purpose [of the LRA] is to
provide for the acquisition of agricultural land by the state for the
objective of land reform. Once such land has been acquired, the
primary beneficiaries thereof are those Namibian citizens who do not
own or have the use of any land or adequate agricultural land and
foremost those Namibian citizens who have been disadvantaged by past
discriminatory laws or practices. In a nutshell, therefore, the
purpose of the Act is, amongst other things, to address the pressing
issue of land reform, a perennial problem associated with this
country’s history. It is apparent from the relevant provisions
of the Act that the purpose is also to regulate the acquisition of
land by foreign nationals.’

[2] The LRA in its
Preamble states the following:

‘To
provide for the acquisition of agricultural land by the State for the
purposes of land reform and for the allocation of such land to
Namibian citizens who do not own or otherwise have the use of any or
of adequate agricultural land, and foremost to those Namibian
citizens who have been socially, economically or educationally
disadvantaged by past discriminatory laws or practices; to vest in
the State a preferent right to purchase agricultural land for the
purposes of the Act; to provide for the compulsory acquisition of
certain agricultural land by the State for the purposes of the Act;
to regulate the acquisition of agricultural land by foreign
nationals; to establish a Lands Tribunal and determine its
jurisdiction; and to provide for matters connected therewith.’

[3]
The LRA as it was applicable at the time the transaction giving rise
to the present dispute was concluded5,
contained the following provisions on acquisition of agricultural
land. Section
17 of the Land Reform Act reads:

‘.
. . The state shall have a preferent right to purchase agricultural
land whenever any owner of such land intents to alienate such land. .
. ’

It
means that the Namibian State has a preferent right to acquire
agricultural land that becomes available on the market. In terms of s
17(2) no agreement for the
alienation of agricultural land shall be of any force or effect until
the owner of the land in question has first offered such land to the
state and has been furnished with a certificate of waiver in respect
of such land.

[4] Section 58(1) in
relevant part states as follows:

‘Notwithstanding
anything to the contrary in any other law contained, but subject to
subsection (2) and section 626,
no
foreign national7shall, after
the date of commencement of this Part, without the prior written
consent of the Minister, be
competent-

to
acquire agricultural land through registration of transfer of
ownership in the deeds registry; or

to
enter into an agreement with any other person whereby any right to
the occupation or possession of agricultural land or possession of
agricultural land or a portion of such land is conferred upon the
foreign national-

for
a period exceeding 10 years; or

for
an indefinite period or for a fixed period of less than 10 years ,
but which is renewable from time to time, and without it being a
condition of such agreement that the right of occupation or
possession of the land concerned shall not exceed a period of 10
years in total.

(2)
If at any time after the commencement of this Part the controlling
interest in any company or close corporation which is the owner of
agricultural land passes to any foreign national, it shall be deemed,
for the purposes of subsection (1) (a), that such company or close
corporation acquired the agricultural land in question on the date on
which the controlling interest so passed.’ (My underlining
for emphasis)

[5] Section 59 in turn
states:

‘Acquisition
and holding of agricultural land for foreign national

No
person shall acquire and hold, as a nominee owner, on behalf or in
the interest of any foreign national any agricultural land if the
Minister's written consent therefor has not been obtained as required
by section 58.

An
agreement which breached s 58(1) (b)(ii) of the LRA was described in Schweiger
bythe Justice in as follows:

‘In
so far as the invalid agreement therefore purported
to grant
the respondent the right of occupation and possession of commercial
agricultural land for a period exceeding ten years apparently without
first complying with the requisites set out in the Act,
such
agreement falls foul of the provisions of s 58(b) (ii) of the Act, is
illegal and void ab
initio.’
(
My underlining for emphasis)

[6]
It is clear from s 58 (1)(a)read
with subsec (2) that the alienation and transfer of a ‘controlling
interest’ in a company or close corporation owning agricultural
land is subject to the Minister’s consent if such acquisition
is by a foreign national.Section
60 of the LRA empowers the Minister to either order the sale of the
land acquired by a foreign national in breach of s 85(1)(a)
or
to acquire it in accordance with Part IV.8Breach
of s 58 does not attract criminal sanctions. Two things are apparent
from this: the first is that an agreement for the alienation and
transfer of a controlling interest in a close corporation without the
consent of the Minister is illegal and void ab
initio.
Secondly, by empowering the Minister to compulsorily acquire such
land for the purpose of land reform, the LRA links the prohibition
against ownership of land by foreign nationals to the public policy
imperative of availing agricultural land to previously disadvantaged
Namibians.

[7]
It is common cause that the plaintiff, a South African national, is a
‘foreign national’ and as such hit by the provisions of s
58(1)(a)read
with subsec (2) of the LRA. It also common cause that he, on 18
February 2003, executed (with the first and second defendants as
‘sellers’) a deed of sale to buy members’ interest
in a Close Corporation, Zaris Farming CC (‘third defendant’),
whose only asset was a farm, Zaris - Oos No. 195, Maltahöhe.
Farm Zaris, it is also common cause, is agricultural land as
contemplated in the LRA. The first and second defendants are
Namibians who held 50% shares each in the third defendant. In terms
of this written agreement, the plaintiff would become the 100%
shareholder in the third defendant. As consideration for the 100%
members’ interest in the third defendant, the plaintiff agreed
to, on their behalf, honor their liability for the acquisition of a
flat at Sand and See Complex, Swakopmund (‘the flat’) -
in terms of the offer for the flat as advertised by the developer of
the complex.

[8] The agreement between
the parties reads as follows:

‘Sales
Agreement: Farm Zaris

Zaris
CC, property of W & AC Dreyer, is sold to W du Toit on the
following terms:

4
payments of R168, 000 payable on the following dates:

28/02/03

12/04/03

11/07/03

17/10/03.’

2
payments of R84 000 payable upon completion of the Sand & See
Flats around 15 December ’03 and the following [one] on
registration of the flat. Transfer of shares will be effected upon
payment of the last installment.’

The pleadings

History of pleadings

[9]
When the present action commenced in 2005, the plaintiff’s main
claim was predicated on fraudulent misrepresentation. The amount
claimed was N$ 672 000.9The defendants denied
fraudulent misrepresentation but consistently admitted the purchase
price. The pleadings on which this case ended up being adjudicated
are radically different from those which brought it to life.

The
pleadings in their amended form can be summarised as follows:

The plaintiff

[10]
The ultimate amended particulars of claim are dated 20 June 2011 and
contain a main claim and two alternative claims. The basis of the
claim remains the agreement dated 18 February 2003. The plaintiff
alleges that he, in compliance therewith, made payments towards the
flat in return for the defendants’ members’ interest in
the third defendant. He alleges that when the agreement was entered
into the parties erroneously assumed that a waiver certificate was
required in terms of the LRA and that what was required in terms of
the law as it stood was the Minister’s consent for the
acquisition by the plaintiff of the defendants’ members’
interest in the third defendant.10It is alleged further
that the Minister’s consent was not obtained and as a result
the agreement was canceled. Since possession of farm Zaris was then
returned to the agreement was canceled and the plaintiff became
entitled to the repayment of the purchase price of N$ 672 000 with
interest a
tempore moraeat
the prescribed rate of 20% interest per annum.

[11]
The first alternative claim is founded on the premise that the
agreement was subject to the suspensive condition that the Minister’s
prior consent would be obtained and that the payment of the purchase
price was done in the bona
fidebelief
that such consent would be obtained. Since such consent was not
obtained the agreement was canceled and the farm returned to the
defendants and that the defendants were enriched in respect of the
purchase price, entitling plaintiff to repayment thereof, with
interest.

[12] The second
alternative claim is conditional upon the court finding that the
agreement is void for being in conflict with s 58 because of the
absence of the Minister’s consent. It is alleged that the
defendants in that regard induced the plaintiff into entering into
the agreement representing to him that the sale of the members’
interest was lawful. It is alleged that the plaintiff was thus
induced by the representation and that, had he known that the sale
was not lawful, he would not have entered into the agreement. The
particulars allege that the plaintiff was at the time not aware that
the agreement was in conflict with s 58, alternatively that neither
party was aware of the illegality. In support of this claim the
plaintiff alleges that, acting on the assumption that the agreement
was lawful, he made the payments for the flat and that, to the extent
the defendants were enriched thereby, they are obliged to repay same
to him. It is alleged that given the enrichment it is in the
interests of public policy that the defendants repay the purchase
price in order to prevent injustice to the plaintiff.

The defendants’
plea and counterclaim

[13]
In their amended plea filed of record on 23 March 201211,
the defendants proceed from the premise that because of an error
common to the parties the agreement of 18 February ‘does not
correctly record the full and precise terms and conditions’
agreed by the parties and that it stands to be corrected to reflect
that the purchase price agreed was N$ 1m and that the plaintiff was
to take ‘all necessary steps and assure that all the
requirements of the’ of the LRA were complied with, with the
reasonable cooperation of the defendants. They also plead that the
original agreement was novated by two other subsequent agreements. In
the way the case has crystallized I need not decide whether or not
there was a novation or not. The defendants admit receiving payment
of the N$ 672 000 and although they do not specifically deny it was
from the plaintiff, put him to the proof. They allege that the
plaintiff failed to take reasonable steps to comply with the LRA and
that they canceled the agreement but not on the grounds alleged by
the plaintiff. The defendants deny making the representations
attributed to them by the plaintiff, alleging that it was the
plaintiff who ‘pursued’ the defendants and ‘convinced
them to sell’ their members’ interest in third defendant.
They plead specifically that the plaintiff assured them that as
foreign national he had previously acquired agricultural land and
knew how to go about getting it legally, by taking all necessary
steps to ensure that the transaction would be lawful for the
registration of the members’ interest into his name.

[14]
The defendants deny that the agreement was illegal in nature and that
it was in fact lawful and that it was at all times possible for the
parties to comply with the LRA as long as the plaintiff took the
necessary steps towards that end.12They plead that only
later did they discover that the plaintiff had no bona
fideintention
to comply with the LRA and that in fact he intended to circumvent s
58 by introducing a sham Namibian member as a 51% interest holder in
the third defendant, making him in delicto ( potior est conditio
possidentis) and as such not entitled to restitution on the
assumption he made the purchase price. They deny unjust enrichment or
that they are obliged to repay the plaintiff. They also deny that
public policy dictates plaintiff being restituted.

Counterclaims

[15] The defendants
counterclaim and seek to have those claims off-set against any
restitution the court may order. The first counterclaim is predicated
on the plaintiff taking possession of the farm following the
agreement and remaining there for a period of 18 months and that on
account of the cancellation of the agreement the defendants were
deprived of possession, occupation and use of the farm. The
plaintiff, it is said, unlawfully occupied the farm and grazed his
livestock thereon and conducted a hunting lodge business. They allege
that the plaintiff was therefore unjustly enriched at the defendants’
expense in the fair and reasonable value of N$15 000 per month,
entitling the defendants to repayment in the amount of N$ 270 000.

[16]
The second counterclaim is a rei
vindicatiofor
specified goods which the plaintiff was allegedly in possession of
knowing they belonged to the defendants. The amount of N$ 95 000 is
claimed as representing the value of those goods. The third
counterclaim is for alleged use of the farm as a hunting rest camp
for which the total amount of N$ 240 000 is claimed. The last claim
is for wood allegedly illegally harvested by the plaintiff on the
farm during his occupancy totaling N$ 40 000. Interest and costs are
claimed on all claims.

[17] Plaintiff’s
case is that these claims were introduced by the defendants in an
attempt to defeat his claim for restitution as the only way the
defendants can escape repaying the moneys paid on their behalf is if
they are the innocent parties in the failed transaction and are able
to prove damages which they can off-set against the amount they are
liable to restitute. The plaintiff maintains that the defendants
failed to prove any damages and therefore the need does not arise for
the court to determine who bears the responsibility for the failure
of the agreement.

[18] It is the
defendants’ case though that unknown to them the plaintiff,
through his purchase of the members’ interest in the third
defendant, attempted to acquire agricultural land in Namibia contrary
to s 58 (1)(a) and (2) and thus turned the contract into an
illegal one. That illegality has the result, the defendants maintain,
that the normal rule of contract that restitution follows
termination, does not apply. The defendants’ case is that they
were not privy to the illegality perpetrated by the plaintiff and
that his having at some stage informed the first defendant that he
had in the past hoodwinked the Namibian authorities in the way he
acquired farm Montana, and intended to do the same in respect of Farm
Zaris, does not make them complicit in the turpus perpetrated
by the plaintiff.

[19]
There is common ground between the parties that the sales agreement
came to an end in August 2004 and that the defendants repossessed the
farm and retained the benefit of the N$ 672 000 paid on their behalf
by the plaintiff towards the purchase price for the flat. There is a
monumental dispute about who was responsible for the agreement not
being implemented as either side accuses the other of bearing the
responsibility. It is common cause that the parties erroneously
assumed that the Minister’s waiver was necessary, and each
accused the other for failing to obtain it in order for the agreement
to take effect. It is now accepted by both parties that the correct
legal position as obtained when the agreement was concluded is that
what was required was the Minister’s consent.13The
plaintiff’s case is that the reason why the sale did not
materialize is irrelevant and that the amount of N$ 672 000 should be
returned, with interest at the legal rate. That is indeed so if it is
an ordinary cancellation of contract and if restitution applies.14

[20]
The defendants stand to benefit substantially if the turpus
causarule
applies: They had the flat paid for by the plaintiff and later sold
it for a handsome profit. In addition, they retained the farm and
sold it for a profit. The plaintiff would walk away with nothing.15The defendants who
benefitted in this way are bound to restore to the plaintiff that
which he gave to them if what prevails is a cancellation of contract
for whatever cause. It is common cause that the defendants will
escape liability only in two circumstances: If they have made out the
case of a valid counterclaim against the plaintiff in respect of .the
damages allegedly caused by the plaintiff , or if I find that the
plaintiff's conduct in the way he went about acquiring ownership of
the third defendant was turpus
causa.

[21]
It is common cause between the parties that the following
consequences flow from an illegal contract: the first is expressed by
the in
turpus causa16rule, ie the principle
that from a dishonourable cause an action does not arise is absolute
and admits no exception. Therefore, if the plaintiff alone was in
turpus causa,
I am left with no discretion to do ‘justice between man and
man’. It is only if the facts of the case establish in
pari delicto potior est conditio defendentis(in
equal fault the condition of the defending party is better) that I
have the discretion to allow the plaintiff to recover the money paid
to the defendants pursuant to the illegal agreement so as to prevent
manifest injustice.17Thus, however,
unconscionable it may seem, if plaintiff was in turpus
causahe
is without any remedy. The public policy rationale for the rule is
stated to be: the
ex
turpis cause non oritur actionrule
as laid out in the Namibian Supreme Court decision in the case of
Ferrari
v Ruch18prohibits
a party from suing on the agreement which is declared to be void.

[22] The defendants have
squarely raised on the pleadings and in evidence the defence that the
plaintiff acted in fraus legis the LRA in seeking to acquire
ownership of the third defendant - the corporate entity that owned
the agricultural land. They rely on his conduct in a previous
transaction (Montana); his conduct in respect of the current
transaction, and his contemporaneous statements made to the
defendants in the course of the negotiations that led to the
execution of the agreement for the purchase of the members’
interest in third defendant. Given that the defence raised by the
defendants is an absolute defence to the plaintiff’s claim and
that their counterclaims are relied on only if their defence based on
turpus causa fails, it is inevitable for the court to deal
with that issue first.

[23] It is common cause
between the parties that at the time the sales agreement was
concluded the plaintiff had stated to the defendants that he would
employ a similar arrangement as he did when he bought farm Montana.

Summary of parties’
unlawful conduct

The Montana
transaction

[24] The plaintiff is no
stranger to the workings of the LRA. He had gone through an
agricultural land acquisition transaction before when he purchased
farm Montana. The evidence establishes on a balance of probabilities
that he had acquired farm Montana in breach of the law by soliciting
a Namibian citizen to become a nominal shareholder. He did that by
making pastor van Niekerk sign a blank share transfer form, which
would enable him to retransfer the shares to himself or anyone else
at any time. Pastor van Niekerk did not pay for the shares; did not
participate in the running of the business; received no dividend from
any profit; did not see any financial statements of the business and,
most importantly, when the farm Montanan was sold in an outright sale
of land transaction sold he neither knew of the fact nor received any
benefit from the sale. The plaintiff was for all intends and purposes
the absolute and sole owner of a corporate entity Avril 67 (Pty) Ltd
that owned farm Montana. He provided all the capital, he took all
decisions on the business and him, and him alone, could and did
decide when to dispose of it, for what consideration and what was to
become of the profit.

[25] I find the following
evidence in respect of the Montana transaction particularly
remarkable: The plaintiff bought farm Montana
in 2001 and the modus operandi
employed entailed formation of a
separate company Avril 67(Pty) Ltd that was the corporate vehicle
used to own farm Montana. A Namibian partner, Mr. Bertus Van Niekerk
was to be the majority shareholder in the said company. Mr van
Niekerk came to testify as a witness under a subpoena duces
tecum on behalf of the defendants.
From his evidence, it became clear that when the plaintiff approached
him in respect of the Montana transaction , it was on the
understanding that he would own in 51% of the shares in Avril 67
(Pty) Ltd and the plaintiff would own 49 %. It is not in dispute that
but for the fact that Mr van Niekerk, a Namibian national, held 51%
shares in Avril 67 (Pty) Ltd, its acquisition of Montana would have
run foul of s 58(2) of the Land Reform Act . Although Mr van Niekerk
had thus, in law, become the beneficial owner of 51% shares in Avril
67, he was not issued with a share certificate and was excluded from
the daily running of either Avril 67 or farm Montana. That the
plaintiff invited Mr. van Niekerk to become a shareholder in Avril
67, not to accord him the full rights of a shareholder, but to create
an impression that he was a shareholder, is apparent from the
following evidence of Mr. van Niekerk:

(a) Mr. van Niekerk did
not pay for the shares and made no contributions;

(b) Mr. van Niekerk was
not issued with a share certificate;

(c) The plaintiff made it
possible for him at any time and without consulting Mr van Niekerk to
transfer the 51% shares held by the latter to himself or anyone he
chose by means of this blank share transfer form executed by Mr van
Niekerk and retained by the plaintiff. As Mr van Niekerk explained to
the court, the plaintiff had at the time explained to him that it was
some kind of insurance that in the event of van Niekerk’s
death, the 51 % shares he held in Avril 67 (Pty) Ltd would not pass
over to his estate or relatives and that Mr Van Niekerk’s heirs
would have no claims against the plaintiff on account of the shares
he held in Avril 67 (Pty) Ltd. The clear implication of this is that
although, in law, Mr Van Niekerk held 51 % shares in Avril 67 (Pty)
Ltd , the plaintiff’s intention was not to accord him the full
rights of ownership over those shares. That by according 51% shares
to Mr van Niekerk, the plaintiff intended to give the outward
appearance that the plaintiff, as a foreign national, did not hold
the controlling interests in Avril 67 is as clear as day light.

[26] The file manager
from Price Waterhouse Coopers (PWC) who had first-hand knowledge
about the affairs of the plaintiff and Avril 67, one Mr. Pieter Du
Toit, testified that the plaintiff had at some stage proceeded to
transfer the 51% shares held by Mr van Niekerk in Avril 67(Pty) Ltd
to himself and thus became the 100% owner of that corporate entity .
According to this witness that became a matter of some concern within
PWC because it fell foul of s 58 of the LRA, and the plaintiff was
advised to have the matter rectified. Although there was some dispute
about why exactly the matter was not attended to and the
rectification not done, the following is very clear:

the plaintiff was aware
that at the point in time when he became 100% shareholder of Avril
67, he had breached s 58(1)(a) and (2) of the LRA;

Mr van Niekerk whose 51%
shares the plaintiff transferred to himself had no real say over
them and that he (the plaintiff), and he alone, could decide what to
do with those shares and thus making Mr van Niekerk a sham
shareholder;

that although he had
become aware of the breach of the law, there was no urgency on the
plaintiff’s part to rectify the situation and that, to this
day, that situation remained un-rectified;

It was clear from the
evidence of both the plaintiff and Mr. van Niekerk that Avril 67
(Pty) Ltd (as owner of farm Montana) was sold in 2008 for N$ 500 000
realising a profit of N$ 230 000. Mr. van Niekerk did not share in
the profits realized from the sale of farm Montana. Not only did he
not have any say over whether or not the company was to be sold , he
was also not consulted on the purchase prize – all indicating
that the 51 % he held in Avril 67 (Pty) Ltd was a sham. Although it
was suggested on behalf of the plaintiff in re-examination and
cross-examination of Mr. van Niekerk that that was so because all
the capital in the venture had been provided by the plaintiff who,
alone, bore the financial brunt of the farm’s operation, it
does not displace the all-important inference that Mr van Niekerk
was a shareholder in name only, an inference buttressed by the
equally telling evidence led at the trial at some length that Mr van
Niekerk did not see any financial statements, did not participate in
any shareholder meeting; and exercised no power over Avril 67 (Pty)
Ltd in any shape or form as a shareholder would do in terms of the
law. This was in clear breach of sec 59 prohibiting a person from
acquiring and holding as a nominee owner any interest in
agricultural land on behalf of a foreign national. The question that
arises but not one for decision in this case, is whether in the
Montana transaction sec 61(2) (b) was not breached. It arises
in this way: Section 61(1) states that the registrar of deed shall
not register any transfer of agricultural land unless there is
submitted to him or her a statement under oath or affirmation by the
transferee , declaring his nationality and whether or not the land
to be transferred will be held by him or her on behalf or in the
interest of any other person and giving particulars of the name and
nationality of that person. If in the statement the transferee
declares that he or she is not a Namibian citizen or will be held by
him on behalf of a person who is not a Namibian citizen, the
Minister’s written approval referred to in s 58 must be
provide. A false representation in such statement is an offence
making the maker thereof liable to a fine not exceeding N$ 20 000 or
to imprisonment not exceeding five years or both.

[27] The evidence in
respect of the Montana transaction is relevant in that it sheds light
on and gives colour to Mrs. Dreyer's (first defendant’s)
testimony ( which is admitted by the plaintiff ) that the plaintiff
had told her that he intended to deploy the same modus operandi
as he did in the case of Montana for the acquisition of farm Zaris.
To the extent that the evidence in respect of the farm Montana
transaction is relevant in explaining the plaintiff’s state of
mind as he went about consummating the purchase of the third
defendant (owner of agricultural land) I make the finding, based on
the evidence I summarised and replete from the record, that in
acquiring Avril 67, the plaintiff had successfully consummated a
simulated transaction to circumvent s 58 and s 59 of the LRA.

[28] Since farm Montana
was sold and the plaintiff had by so doing divested himself of any
interest he held in farm Montana, it is therefore not possible for
the Minister to invoke his powers in terms of s 60(1)(a) supra
of the LRA. Given that no criminal offence ensued from the breach of
s 58(1)(a), no criminal prosecution is possible against the
plaintiff from his flouting of the Act as regards the farm Montana
transaction, unless s 61 was breached as stated above.

The farm Zaris
transaction

[29] The first defendant,
Mrs. Dreyer, testified that she enquired from the plaintiff as to how
he could own land in Namibia in light of the fact that he was a South
African citizen and that he informed her that he knew how to deceive
the Namibian authorities and that he would use the same method he
used in purchasing Montana to acquire farm Zaris. The evidence shows
that when the Du Toit family (plaintiff, his wife and their son) and
the Dreyer Family( the defendants) met in Swakopmund on 03 February
2003, the second defendant informed the plaintiff, in the presence of
his wife, that they were prepared to sell to the plaintiff their
members interest in the third defendant if, in return, he agreed to
honor the defendants’ liability for the acquisition of the flat
in terms of the offer for the flat as advertised by the developer of
the flat. A deed of sale, prepared by the second defendant, was then
concluded between the plaintiff and the second defendant. I set out
the agreement in full in paragraph 8 of this judgment.

[30]
The effect of this agreement is clear: the defendants had agreed to
sell their members’ interest in the third defendant to the
plaintiff who they knew was a foreigner. The heading to the written
instrument makes clear that the subject of the sale was farm Zaris
which is agricultural land and thus hit by s 58 of the Land Reform
Act. Had the defendants sought and obtained informed advice19it would have been clear
to them that the agreement in the form they executed it, breached s
58 of the Land Reform Act as it purported to transfer their members
interest in third defendant to the plaintiff( a foreign national)
alone without Ministerial consent20.
The defendants’ suggestion that it was agreed with the
plaintiff that he would comply with all the necessary legal
requirements of the LRA before the plaintiff took transfer of their
members’ interest is difficult to reconcile with the objective
facts in this case: How could they have assumed that such consent
could be had for the asking? The Minister might well have refused the
consent. Secondly, it is clear from the evidence that it was on the
very day of the signing of the agreement that the first defendant
procured the plaintiff to go to the attorneys attending to the
transfer of the flat into defendants’ name in order to make the
first payment. The obligations of the parties kicked in the moment
the payment was made, for the defendants had then the expectation
that the plaintiff would continue to make the payments in terms of
it. In fact the fact that the parties considered their respective
rights and obligations to have kicked in is further demonstrated by
the fact that the defendants gave possession of the farm to the
plaintiff at once and even begun to sell off to him some of their
property which was on the farm. The probabilities do not favour the
version that the plaintiffs expected the plaintiff to honor his
commitments towards the purchase of the flat on the basis of what he
was still to do to comply with the ‘necessary requirements’
of the LRA. It negates prudence that they would on the expectation of
his complying with those unspecified requirements have given
occupation of the farm to the plaintiff, as stated by the plaintiff
and confirmed by witness Pierre Visser , on the basis that especially
the first defendant said that the farm was the plaintiff’s as
long as he paid for the flat.

[31]
The suggestion by Mr Nel, on behalf of the defendants that the
inclusion of a Namibian as a member holding 51% interest in Zaris
Farming CC was legal as long as it was a genuine transaction and that
the defendants were blameless in that they were not privy to the fact
that the plaintiff intended to execute a simulated transaction using
a Namibian, overlooks the fact that the genesis of the illegality was
the agreement executed by the defendants with the plaintiff, allowing
him to take transfer into his name of all of the members interest in
the third defendant. The agreement was already illegal and void
ab initioas
at that date: it did not so become because the plaintiff had intended
to bring in a sham member into the close corporation. The fact that
the first defendant asked the plaintiff how he, as a foreigner, was
able to acquire land in Namibia is clear evidence that shewas aware of a
restriction on foreigners to own land in Namibia. The evidence shows
that she had conveyed her discussion with the plaintiff on that issue
the second defendant who too must therefore be taken to have shared
the awareness of the need for Ministerial consent with the second
defendant. The evidence of the plaintiff and his wife, the two
defendants and Mr Visser left me with in no doubt that the second
defendant had some obsession with the flat and that,
in my view, blinded the defendants to the need to exercise caution
and to, at the very least, seek informed advice to make sure that the
agreement to transfer all the members interest in the third defendant
to the plaintiff was permissible under Namibian law. The defendants
therefore must bear their share of blame for the illegal contract
executed on 3 February 2003.

[32]
Not only is it common cause, but the plaintiff admitted, that he
intended to replicate the Montana transaction in his endeavour to
acquire farm Zaris. The defendants place great store by this fact. I
am satisfied that the manner in which the Montana transaction was
done was in fraus
legisas
it was a simulated transaction.21Mr Nel argued that the
evidence shows that the defendants were not privy to the plaintiff’s
illegal plan to execute the contract as, unknown to them, the
plaintiff did not have a bona
fideintention
to conclude the sale of the members’ interest in a lawful way.
Mr Nel also added that the plaintiff reneged on the original purchase
price of N$ 1 m and sought to acquire the farm at a bargain.

[33] I find it
established on a preponderance of probabilities that the plaintiff
intended to replicate in the farm Zaris transaction a simulated s
58(1)(a) and (2) - proof transaction. I find no evidence on
the record to support the inference that the defendants made common
cause with him in that endeavour. What is clear though is that the
launching pad for the carrying out of that nefarious scheme was the
agreement entered into by the parties on 18 February 2003, which, per
se, breached s 58 of the LRA. The defendants cannot eat their
proverbial cake and have it. The approach to the issue that is taken
on their behalf is contrived and self-serving: On the one hand they
maintain ( obviously to escape the in pari delictum rule) that
they were not privy to the plaintiff’s intention to introduce a
sham of 51% member into third defendant but agreed with him, so they
say and the argument goes, that the plaintiff would ‘ensure
that all statutory requirements are met before the members’
interest could be transferred to him’. On their version
therefore, before the plaintiff could have the members’
interest transferred into his name, he had ( but not the
defendants ) to comply with ‘all statutory requirements’
– yet they say they did not know what those requirements were
and relied on the plaintiff who said he knew the process as he had
done it before. Curiously, the defendants proceeded at once to
procure the plaintiff to start making payments on their behalf in
respect of the coveted flat. What if the ‘statutory
requirements’ were not met for a reason other than the
plaintiff’s doing?

[34] I am satisfied on a
balance of probabilities that the defendants considered and regarded
the 18 February 2003 agreement as the operative agreement that bound
the parties to the sale of the members’ interest in third
defendant and therefore activated the corresponding obligation to pay
for the flat on their behalf. It is that agreement that breached s
58(1) (a) and (2) of the LRA. It is untenable to argue that
the 18 February 2003 agreement was not illegal. The consent the
plaintiff had to obtain from the Minister was only possible based on
an agreement with the members of the third defendant. That agreement
shows that he was to be the 100% member of the third defendant. There
was no other agreement. How else could the plaintiff have proceeded
to have the founding statement amended at the Companies office if it
was not on the strength of that agreement? All these questions and
issues arise logically from the evidence and arguments of the
defendants. Accordingly, I do not accept Mr Nel’s premise that
the illegality existed only in the intended scheme of the plaintiff.

[35] Mr Nel in his final
submissions argued that the plaintiff’s lack of bona fides in
the way he sought to obtain ownership of third defendant (as owner of
agricultural land) must be seen together with his equally
reprehensible snatching at a bargain in reneging on the parties’
agreement on the purchase price which, he argued, the evidence showed
was N$ 1 m but the plaintiff ‘blackmailed’ the defendants
into accepting was N$ 840 000. Given the rather strong tone in which
that allegation is made, I think it is important that I deal with
this matter so that my views on it are clear for the record.

[36] It is alleged by the
plaintiff that the purchase price was N$ 840 000 as evidenced by the
agreement that both parties signed. The defendants’ case is
that the written agreement of 18 February 2003 is not a complete
memorial of their agreement on the purchase price and that when the
parties realised that a mistake was made, the plaintiff subsequently
agreed that he would offer an acknowledgement of debt for the balance
of N$160 000 to bring the total purchase price to N$ 1m. The
plaintiff denies such an agreement and the probabilities favor his
version.

Facts and
Circumstances Favoring the inference that the agreed purchase prize
was N$ 840 000 and not N$1m.

[37] The written
agreement entered into between the parties makes no mention of the
alleged purchase price of N$ 1 million. Additionally, the defendants
had the opportunity at a very early stage to put the matter right but
did not. They both testified that they discovered the mistake the
very day that the document was prepared and signed but did not
immediately bring it to the plaintiff’s attention with the
request that they put the common mistake right at once. It bears
mention that the agreement of 18 February 2003 was prepared by the
second defendant. From the first moment they had the opportunity to
plead to the plaintiff’s claim that the agreed purchase price
was N$840,000, the defendants admitted that to be the case. That line
of pleading continued well into the trial. It was only after evidence
begun to be led that the suggestion was made that the purchase price
was N$1m, followed by a change in the plea.

[38] The first defendant
suggested in evidence (and only in cross-examination) that the error
had been pointed out to the first legal practitioner of record who
promised to rectify it and, for good measure, to come to court and
confirm the fact. That lawyer was never called as a witness. The
difficulty for the defendants is that even the next legal
practitioner of record who ought then to have been instructed by them
to put the matter right did not do so but in pleadings continued to
admit as true the allegation that the purchase price was N$ 840 000.
Mrs. Dreyer confirmed to the court that she had the opportunity to
consult with Mr. Heathcote who settled the initial plea. It is not
probable that such a mistake would have been made if the same facts
now put before court apropos the purchase price were presented to Mr.
Heathcote. Mrs. Dreyer testified that at every point where the
purchase price of N$ 1 m was mooted, the plaintiff showed no interest
at all and appeared to think that it was too much.

[39] Both defendants
maintained that the amount of N$ 1 m was proposed by them in order to
discourage the plaintiff’s interest in the farm as they
considered it part of their retirement plan. The evidence of the
defendants, particularly Mr Dreyer’s, that the plaintiff put
pressure on them to sell the farm to him, sit uncomfortably with the
fact that:

the initiative that
ultimately led to the conclusion of the deed of sale, was initiated
by Mrs Dreyer;

the transaction was
directly linked to the purchase of the flat which Mrs Dreyer, the
evidence shows, had become obsessed with. Had the plaintiff not
agreed to the transaction, the option held by Mrs Dreyer for 28
February 2003 would have fallen away. It speaks volumes that Mrs
Dreyer procured the plaintiff to go to the estate agent conducting
the transaction for the property developer to make a first
installment under the payment schedule contained in the brochure for
the flat.

[40]
Since much was made of it during the trial, I wish to make clear that
I find as preposterous the suggestion that the plaintiff must have
had some ulterior motive in not wanting a lawyer to draft the deed of
sale, first offering to draft the deed of sale himself but at the
last minute insisting that the second defendant does it. It does not
appear to me as common sense that the plaintiff would have had
greater room for mischief by drafting the agreement himself than if
the defendants did. It really requires no rocket science to reduce to
paper the simple proposition that the parties agree to the sale of
the members’ interest for N$ 1m. After all, Mrs. Dreyer
testified that when she became interested in the flat , she called
the plaintiff and put the proposition to him in which he became
interested, principally because it afforded him the opportunity to
pay the purchase price in installments. Would a reasonable pater
familias(seller)
in such circumstances not take the simple precaution to prepare a
written instrument that commits the prospective buyer to the sum of
N$ 1 million? Mr. and Mrs. Dreyer had the possibility to seek the
assistance of their son-in-law (an advocate) to prepare the most
rudimentary legal instrument that memorialized the transaction
between them and the plaintiff. They did not and now seek to have an
adverse inference drawn against the plaintiff for not wanting a
lawyer to draft the contract and putting pressure on them to do so.
In so far as it may later become relevant, I find that the agreed
purchase price was that alleged by the plaintiff and not the N$1m
alleged by the defendants.

[41]
Two consequences follow from the finding that the 18 February
agreement was illegal and that the plaintiff acted in fraus
legis:
the first is that the matter cannot be approached as an ordinary
contractual claim in view of the illegality tainting the contract
between the parties and ,therefore, restitution under the normal
rules of contract does not find application.22The second consequence is
that given that the defendants had themselves been privy to the
illegal contract, the turpus
causarule
does not apply. In my view, the fact that the plaintiff intended to
act in fraud of the law is a factor not attributable to the
defendants and for that reason lessens their guilt (confined as it is
to the original illegality of the agreement), but one that aggravates
the guilt of the plaintiff as it includes the original illegality and
the fact that he had clearly intended to engage in a simulated
transaction in the same way he did with the Montana transaction. The
only evidence that the applicant relies on for the inference that the
defendants were complicit (in the event that it is found that the
plaintiff intended to mislead the authorities) is the evidence of the
first defendant , that upon her asking the plaintiff how he, as a
foreigner, was able to acquire land in Namibia, he had told her that
he is able to deceive the authorities' and that he had experience in
these matters as he had done a similar previous transaction and knew
what he was doing. There is no suggestion on his part and certainly
no admissible evidence that the defendants knew that the plaintiff
intended to allocate 51% interest in the third defendant in order to
circumvent the law. Accordingly, the plaintiff bears more culpability
than the defendants’.

[42]
Mr. Frank submitted that in the event that I find (as I do) that the
par delictum rule apples , the rule should be relaxed because the
plaintiff was not aware of the illegality at the date of the
conclusion of the agreement23and
to avoid unjust enrichment of the defendants in retaining the money
paid by the plaintiff, the farm and the flat.

The law in Namibia on
consequences of an unlawful contract

[43]
Where an agreement is prohibited by law and the parties thereto are
in par
delicto - as
a general rule neither can get relief from the operation of the
contract unless the party seeking relief from the court can establish
that he or she did not act dishonorably.24The
rule is based on the ‘clean hands’ doctrine that holds
that the court ought not to render assistance to those whose aims are
inimical to public policy and the imperative that the courts should
seek to deter illegality by denying recovery by parties to such
transaction.25In
Ferrariv
Ruch26the
supreme court held that although the aim of the par
delictumrule
is to deny the help of the court to persons who part with money in
furtherance of an illegal transaction, the rule may be relaxed to
avoid injustice and to do justice between man and man. Mahomed CJ
approved Jajbay
v Cassim27in
Ferrari.28Stradford
CJ in Jahbhay
v Cassim 1939
AD 537 stated (at 544):

‘.
. . . Courts of law are free to reject or grant a prayer for
restoration of something given under an illegal contract, being
guided in each case by the principle, which underlies and inspired
the maxim . . . a court should not disregard the various degrees of
turpitude in delictual contracts. And when the delict falls within
the category of crimes, a civil court can reasonably suppose that the
criminal law has provided an adequate deterring punishment and
therefore, ordinarily speaking, should not by its order increase the
punishment of the one delinquent and lessen it of the other by
enriching one to the detriment of the other. . . in cases where
public policy is not foreseeably affected by a grant or a refusal of
the relief claimed, that a court of law might well decide in favour
of doing justice between individuals concerned and so prevent unjust
enrichment.’

[44]
The ratio decidendi
of Ferrari
can be summed up as follows: The first principle is that the
Court will not come to the assistance of a litigant who parts with
money or chattels in furtherance of prohibited agreements. The Court
may relax the rule in order to do simple justice between individual
and individual. There are no fixed rules when the Court will relax
the rule. The following considerations are however relevant to such
an inquiry:

would not relaxing the
rule unjustly enrich one party at the expense of another ? ;

awareness of the
prohibition of the agreement by law is not by itself a bar for a
plaintiff who seeks relaxation of the rule and to seek the recovery
of the moneys or property transferred to the adversary pursuant to
such agreement;

relaxation of the rule
can be legitimately resisted if it has the indirect effect of
enforcing an illegal agreement.

awareness of illegality
of the agreement by the plaintiff is not a bar by itself to the
recovery of moneys or the property transferred to the adversary.

the relative degrees of
turpitude attaching to the contact of the parties in entering and
implementing the unlawful agreement are relevant considerations.

the par delictum
rule should be relaxed in appropriate cases to prevent manifest
injustice.

[45]
The common law was recently restated by Shivute CJ in Schweiger
v Muller.29The
learned Chief Justice observed that while a prohibited agreement
‘cannot be enforced by virtue of the well-known maxim ex
turpi causa non oritur actio(from
a dishonourable cause an action does not arise) which is absolute and
admits no exception, the maxim in pari
delicto est conditio defendentis(in
equal fault the condition of the defending party is better) in some
cases it may be relaxed to allow a plaintiff to recover money paid or
property delivered to a defendant pursuant to an illegal agreement so
as to prevent manifest injustice.’

[46]
In argument, Mr Nel placed accent on the part of the dicta in Jahbaywhich suggest that where
public policy is a predominant consideration for the prohibition in
defiance of which the illegal contract was concluded no relaxation of
the par
delictumrule
is permissible. He argued on the strength that there is a clear
public policy consideration behind the LRA and that for that reason
the inpar
delictumrule
should not be relaxed in order to do simple justice between
individual and individual. Without meaning any disrespect to this
line of reasoning, it does not arise because in my view of this case,
both parties bear some responsibility for the illegal agreement that
was entered into. That is the basis for my finding that in this case
turpus
causadoes
not apply and that the parties are in par
delictum.Mahomed
CJ recognised in Ferrari
v Ruch that
the relative degrees of turpitude attaching to the contact of the
parties in entering and implementing the unlawful agreement is a
relevant consideration in determining whether the rule should be
relaxed in a particular case. In my view, it must follow that the
parties’ relative degrees of turpitude is equally a relevant
consideration in determining the extent to which restitution must be
allowed.

[47] The parties’
relative degrees of turpitude is, in the present case, relevant to
both determining if the rule should be relaxed and the extent to
which restitution must be allowed. I am satisfied that this is a
proper case to relax the par delictum rule to avoid manifest
injustice and in order to allow for some restitution to the plaintiff
as not doing so in circumstances where the defendants are, although
to a lesser extent, party to an unlawful agreement will have the
effect of unjustly enriching them disproportionately. The
plaintiff and the defendants must share the blame for the fact that
they executed a contract on 3 February 2003 which allowed the
plaintiff to become absolute owner of the members’ interests in
the third defendant. Either side knew (the plaintiff because of his
previous land acquisition deal relating to Montana) or the defendants
(on their own admission evidenced by their direct inquiry to the
plaintiff as described earlier) that Namibian law placed a
restriction on a foreigner’s ownership of agricultural land.
That alone must have placed them on the guard and to seek legal
advice to ensure that their agreement complied with the law.

[48]
Given that the defendants share some blame for the illegal contract,
the parties are in pari delictum.
The unenforceability of the agreement arises from its non-compliance
with s 58, whether or not the parties were aware of its illegality
and in that respect the defendants contributed to the illegality as
much as the plaintiff. That then leaves me to consider the
issue of interest claimed by the plaintiff.

The claim for interest

[49] From Ferrari
and Schweiger the following further principles can be
distilled when it comes to interest arising from an illegal
agreement: The Court will be loath to order interest on the capital
sum paid under the unenforceable contract if doing so indirectly
constitutes enforcing all the material terms of the unenforceable
contract. Interest on capital must be dealt with separately and the
court should determine whether in respect of each the defendant was
unjustly enriched. Doing justice between individual and individual
may be achieved by putting both parties in the position they were in
immediately prior to the conclusion of the illegal agreement. That is
the route followed by the Supreme Court in Shweiger.

[50] Mr Nel pointed out
in argument that to allow an order of interest as prayed by the
plaintiff will have the effect that for the nine years and more, the
amount the defendants must pay to the plaintiff will come to about N$
1 321 600, on top of the principal amount of N$672 000. This is a
substantial sum considering that interest is payable until the debt
is liquidated. The Supreme Court has cautioned that interest should
not be granted where doing so has the effect of enforcing the
unlawful agreement. What is claimed in this case is not interest
agreed between the parties but interest tempore morae on the
prescribed rate. In effect, the interest claimed is aimed at
enforcing the claim for restitution under the normal principles of
contract law, which, as I have found, are not applicable for the
reason that the parties’ contract is an illegal one and that
the plaintiff acted more dishonorably than the defendants in the
process. Restitution upon relaxation of the par delictum rule
is not equivalent to restitution following cancellation of contract.
The former is granted to avoid manifest injustice while the latter
follows as a matter of law and as of right. In my view, therefore,
granting interest to the plaintiff as claimed will have the effect of
indirectly enforcing the illegal agreement. That is not permissible.

[51]
Although the present case is distinguishable from Schweigerin that in that case the
court had not found any evidence that the money received had been
invested or had added interest in any other manner (in the sense of
bearing ‘fruits’ for the party enriched) 30,
sight cannot be lost of the fact that in the case before me, during a
period of about 18 months the plaintiff was in occupation of farm
Zaris, carried on farming there and for all practical purposes acted
as if he were the owner of the farm. That, in my view, is a not
inconsiderable recompense for the interest he might have earned had
he invested the money. That the plaintiff lost out on additional
interest on his money because of the long lapse of time between when
he vacated the farm and the finalization of this case is not in
doubt. However, it is the result of tactics deployed in the course of
the trial for which the plaintiff is responsible in equal measure as
the defendants as more fully explained in the part of this judgment
where I deal with the issue of costs.

[52]
The plaintiff intended to go beyond the original sin created by the
18 February agreement by being intent on introducing a sham 51%
member into the third defendant in the same way he did with the farm
Montana transaction. He therefore bears greater blame than the
defendants do. The defendants on the other hand stand to benefit
disproportionately from the illegal contract if the in
par delictumrule
were not relaxed to do simple justice between the parties. Public
interest demands in this case that the plaintiff be refunded the
moneys he paid to the defendants towards the purchase price of the
flat. Granting him his claim for interest of 20% a tempore morae
would have the effect that he benefits from his illegal conduct. I
would therefore deny him interest on the claim. It will be unjust to
the plaintiff if I do not order the defendants to pay interest from
the date of judgment to the date the moneys are paid back in terms of
this order.

Costs

[53] Plaintiff prays for
a special costs order because of what plaintiff’s counsel
argues was the undue prolonging of the matter by the defendants. On
the other hand, the defendants pray for a costs order against the
plaintiff on the scale of attorney and client for what is
charachterised by defendants’ as the fraudulent and dishonest
scheme employed by the plaintiff to obtain a controlling interest in
the third defendant and the unfounded allegations made by the
plaintiff against the defendants.

[54] Costs is a matter
within the court’s discretion. Ordinarily, costs must follow
the event. The plaintiff has succeeded in obtaining an order granting
him restitution of the purchase price, while the defendants
successfully resisted his claim for interest. That fact alone would
have led me, in my discretion, to deny either side an order for
costs. However, there is more than that. The manner in which this
case was litigated calls for censure of both parties. There has, in
my view, been after the fact rationalisation by either party during
the course of the trial. To a greater or lesser extent, both parties
amended pleadings or tailored evidence to suit the circumstances. The
very extensive amendment by both sides had the result that the case
to be finally adjudicated was very different from the one originally
pleaded by the parties. That much is common cause.

Reprehensible conduct
by the parties

The plaintiff

[55]
This case was commenced by the plaintiff principally relying on the
alleged fraudulent misrepresentation by the defendants. It was
alleged that the defendants knowing that the sales agreement between
the parties was illegal ‘expressly misrepresented’ to the
plaintiff that it was a lawful agreement. It was very late in the day
after denials in the plea that this stance was abandoned. Remarkably,
the plaintiff feigned ignorance of the allegations of fraud against
the defendants under cross-examination and implied that it was made
without his instruction. I reject that suggestion as palpably false
and agree with Mr Nel that if indeed that were the case, his legal
practitioners of record would have taken the stand to say so to the
court. It is trite that allegations of fraud should not be made
lightly and if made require strong evidence to be sustained.31The
plaintiff acted most reprehensibly in making allegations of fraud
against the defendants, which he could not sustain. That calls for
censure.

[56] Another aspect of
the plaintiff’s conduct that calls for censure is the fact that
he laid baseless charges of criminal conduct against the second
defendant, which were so palpably unmeritorious that he never even
pursued them and had hard time explaining in court why he did not
pursue them to their logical conclusion. It was obvious to me that
the reason nothing came of these charges was not lack of interest on
the part of the authorities but his lack of interest in them. The
inference that he initiated them in order to gain some advantage over
the defendants over their dispute is inescapable. Another incident is
a denial made by the plaintiff through the cross-examination of the
first defendant that she met with the plaintiff on farm Zaris on the
weekend of 2 March 2003. He based the denial on the assertion made by
counsel on his instruction that he could not have met the second
defendant as alleged by her because on that date he was in South
Africa and that his passport would prove as much. That allegation too
had to be retracted because, when produced, his passport proved the
contrary. Considering that the challenge to the first defendant’s
version of events was made to place her testimony in unfavorable
light in preference for his, such false instruction to counsel is
most reprehensible.

[57] These incidents
compel me to agree with the suggestion made by Mr Nel in argument
that the ‘pattern of instructions given by the plaintiff to his
legal representatives to launch very serious attacks’ on the
characters of the defendants were ‘unsubstantiated and false’.
In addition to all these considerations, the evidence amply
demonstrated that he is a man who showed no respect for the laws of
Namibia. He successfully flouted the laws of Namibia once and had the
audacity to try to do so a second time. The least the courts of this
land can do is to frown upon his conduct by denying him the costs of
seeking legal redress from the courts of the land whose laws he has
shown blatant and callous disrespect.

The defendants

[58] The defendants’
counterclaimed against the plaintiff in respect of kudus shot on the
farm and the alleged use by the plaintiff of the farm as a rest camp.
Additionally, they claimed the return of moveable property allegedly
appropriated by the plaintiff or damages. They gave very detailed and
heart-wrenching evidence about the destruction caused to the farm by
the plaintiff but all that evidence counted for nothing because no
damages were claimed against the plaintiff for the alleged damage.
Mr. Dreyer explained in evidence that he chose not to bring a claim
in respect of such damage because it would have required him to lead
expert evidence to prove the damages, but curiously, the defendants
called an expert (Mr Hennes) in an attempt to prove the claim in
respect of the value of the property allegedly retained by the
plaintiff and in respect of which rei vindicatio was sought.

[59] I agree with Mr
Frank’s submission that Mr Hennes came nowhere near proving the
values of any of the items he was called upon to prove. The
defendants’ counterclaims were clearly intended to avoid
liability to repay the plaintiff’s money paid on their behalf
in respect of the flat in the event of the court finding that the
normal rules of contract applied to the case. The raft of them was so
meritless that the defendants abandoned them any event , and so much
of them as survived were clearly not proved, including the claim for
occupational rental in respect of which no basis whatsoever was laid
for the quantum claimed. It bears mention that the defendants also
relied on prescription. Extensive pleadings were exchanged in that
regard and plaintiff’s counsel also dealt at some length in
their heads of argument with the plea of prescription. It was however
abandoned by the defendants and not as much as mentioned in their
heads of argument. Another issue that is worth mentioning is the
persistent non-admission by the defendants that the N$672 000 was
paid by the plaintiff and putting him to the proof thereof.
Considerable time was spent ventilating this issue at the trial.
Clearly it was not warranted because it was so obvious that the
moneys were paid by the plaintiff. The defendants had even in the
past offered to repay same to him. This strategy also added to the
costs of this matter.

[60] To the extent that I
attribute reprehensible conduct to a party for abandoning a
particular plea or point, it is important to explain that I do not do
so lightly, for the parties must be allowed in our adversarial system
to pursue any claim or defence that they feel they are entitled to
under law. It is therefore not so much the fact that it was made and
abandoned that is the problem, but the ease with which it was
abandoned after considerable court time and parties’ resources
were spent. That raises the inference that it was not made with
serious intent but to wear down the opponent. Several postponements
occurred because of the ever-changing stances of the parties and this
case took much longer than what the real issues in dispute merited.
The case commenced in 2005 and was only finalised in 2012. The
parties must share the blame.

[61] I will therefore not
apportion any blame to one party for the manner in which this case
was litigated. I will accordingly make an order that each party bear
their own costs. I make the following order:

The defendants are
ordered to pay to the plaintiff the amount of N$672 000, jointly and
severally, the one paying, the other to be absolved ;

The defendants are
ordered to pay interest at the prescribed rate of 20% per annum on
the sum of N$ 762 000 from the date of this judgment to the date of
payment at the rate prescribed by law.

5The
agreement was concluded on 18 February 2003. There was then an
amendment to the Act in March 2003 which required the obtaining of a
certificate of waiver where controlling interest in a corporation
passed to a foreigner. That amendment only came into effect on 1
March 2003 and did not apply to the agreement which is the
subject matter of the present dispute. An issue initially arose
whether it became applicable on account of alleged subsequent
novation of the agreement requiring obtaining of a certificate of
waiver in terms of the new statutory regime. That issue no longer
falls for resolution in way the parties have now defined the ambit
of their dispute.

6Section
62(1) states: The provisions of this Part shall not apply to the
acquisition of agricultural land by a foreign national-

By virtue of any
succession ab intestatio or testamentary disposition;

Which is a public
company conducting business as a banking institution…

Which is a company of
which the shares are listed on a licensed stock exchange in Namibia
as defined in section 1 of the Stock Exchanges Control Act, 1985…

(2) The Minister may-

(a) notwithstanding
anything to the contrary in this Act contained, after consultation
with the Minister of Agriculture, Water and Rural Development , by
notice in the Gazette exclude from the application of the provisions
of this Part any agricultural land or nay category of such land or
any category of persons.

(b) at any time vary or
withdraw in like manner such notice.

7Defined
amongst others as ‘ a person who is not a Namibian citizen’
and ‘n relation to a close corporation , a close corporation
in which the controlling interest is not held by Namibian citizens
or ‘a company incorporated in Namibia in which the controlling
interest is not held by Namibian citizens or by a company or close
corporation in which the controlling interest is held by Namibian
citizens.

8Compulsory
Acquisition of Agricultural Land for the purpose of land Reform in
terms of s 14(2) which states:

‘The minister
shall under subsection (1) be competent to acquire-

Any agricultural land
offered for sale to the Minister in terms of section 17(4);

Any agricultural land
classified as under-utilised and in terms of subsection (3)

Any agricultural land
or portion or portions of such land classified as excessive land in
terms of subsection (3); or

Any agricultural land
acquired by a foreign national, or by a nominee owner on behalf or
in the interest of a foreign national, in contravention of section
58 or 59.

9Being
the amount which, it is common cause, the plaintiff paid towards the
flat on behalf of the defendants. It fell short of the total
purchase price of N$840 000 for which the flat was advertised
because of the disputes that arose.

10There
is the further averment in the alternative allegation that a waiver
certificate was additionally required in the event the court finds
that the agreement was subsequently novated. Nothing turns on that
in view of the fact that in the way the case has crystallized I no
longer need to decide whether or not the agreement was novated.

15As
Mr. Frank submitted, and I didn’t understand Mr. Nel to
dispute that seriously, the defendants benefited from the
termination of the contract ad still enjoy the fruits of the
plaintiff’s N$ 672 000. They sold the ft for N$ 1.1 Million
when it cost them N$ 840 000 and they sold the farm Zaris for N$ 3.5
million against the backdrop that they had agreed with the plaintiff
to sell it for N$ 840 000.

19Which
it is reasonable to have expected them to do against the backdrop of
their asking the plaintiff, how as a foreigner, he was able to
acquire agricultural land in Namibia- a state of mind which
demonstrates that they harboured the suspicion that their agreement
with the plaintiff might be subject to regulation, thus imposing a
duty on them to act carefully.

20That
is the reasoning behind the finding in the Schweiger that the
agreement was illegal and void ab initio.

21Which
is a dishonest transaction in that the parties to the transaction do
not intend it to have the legal effect it purports to convey: Michau
v Maize Board 2003 (6) SA 459(SCA). In casu the legal effect
conveyed is that Mr. van Niekerk was a genuine shareholder when in
effect he was a nominee of the plaintiff. It is dishonest in that
the plaintiff by so doing shielded himself from the prohibition
against having a controlling interest in a corporation that owns
agricultural land while not having the Minister’s consent.

23A
suggestion that I cannot agree with. He might not have known just in
what form permission was required, but from his Montana experience
the probabilities are that he knew that the agreement he concluded
could not be implemented in the way that he concluded it with the
defendants.